India: Diversity drives opportunity in the land of extremes

Strong consumer confidence underpins a broadly positive economic outlook as the migration to mobile expands marketers’ horizons beyond India’s urban centres.

As the world’s seventh largest economy, India is firmly fixed on the radar of the global business world. Inflation has declined over 6 percentage points between late 2013 and 2015 and the country’s current account deficit has seen a dramatic decline from a peak of 6.7 percent of GDP in 2013, to an estimated 1 percent this year. Relative to other developing nations across the world, India’s macroeconomic position is positive. Compared to Brazil, Indonesia, South Africa, Turkey and Russia, India’s level of vulnerability has dropped from highest in 2010 to now level with Russia and outdo Brazil and South Africa.

India’s economic future holds great promise with the administration showing marked determination for fiscal consolidation over the next decade. Inflation is largely under control, and macroeconomic indicators look positive. This reflects on consumer sentiment, with India posting the highest consumer confidence levels globally and Indian consumers feeling optimistic about job prospects.[i]

While the government plays out its role as an enabler, and business owners ready themselves for growth, attention toward consumer behaviours and purchasing habits has never been greater.

The migration to digital is driving mobile consumption and while digital behaviour was previously an urban phenomenon, the advent of smartphones has seen consumers across social strata empowered and savvy, resulting in a native adoption of technology-enabled conveniences. Of the 700 million mobile users in India today, 180 million own a connected smartphone. Notably, just 9 percent of time spent on smartphones can be attributed to traditional voice calls—a clear sign of a maturing digital market—and consumers across the country are embracing more sophisticated mobile activities such as shopping and banking (2014 to 2015 saw mobile shopping up from 39 percent to 69 percent, mobile payment apps penetration up from 43 percent to 59 percent, and banking apps up from 18 percent to 31 percent[ii]).

The mobile-first trend is significant for the Indian economy not just because it will be a sizeable chunk of the consumption figures, but also because it gives both the administration and brands access to consumers in far flung areas of this sizeable country. And with the government and industry focusing on driving self-reliance and independence from global uncertainty, for the majority of global and local organisations India remains an attractive market for sustainable growth.